Some Republicans in the Iowa legislature have said it’s time to end state payments to cities, counties and school districts that cover a decline in commercial property tax revenue, but Governor Kim Reynolds is reluctant to break a promise.

The annual payments were set up in 2013 when the legislature and Governor Terry Branstad acted to cut commercial property tax rates by 10 percent. Reynolds is open to discussing changes in the future as part of a larger tax reform package, but she says local officials need to be part of the negotiations.

The state is scheduled this year to pay more than 150-million dollars to account for lower commercial property tax payments to local governments. Without that money from the state, local officials say cities, counties and school districts would be forced to make budget cuts or raise local property taxes.
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